Sandip Kumar Keshari Vs ITO (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT) Kolkata addressed the appeal of Sandip Kumar Keshari against the order of the National Faceless Appeal Centre concerning Assessment Year 2017-18. The central issue raised by the assessee was the legality of the assessment order passed under Section 147 read with Section 144B of the Income Tax Act, arguing it was unlawful due to the Assessing Officer’s (AO) failure to issue a notice under Section 143(2). The case originated from the assesses non-filing of income tax returns, leading to the initiation of proceedings under Section 147 with a notice under Section 148 served on March 24, 2021. Despite subsequent notices under Section 142(1) and a late return filed by the assessee on March 1, 2022, the AO proceeded to make additions for unexplained money under Section 69A and other income, ultimately assessing a total income of 2,93,80,846/-. The Commissioner of Income Tax (Appeals) [CIT(A)] had earlier dismissed the assesses appeal due to a lack of submission of supporting documents.
During the ITAT hearing, the assesses counsel argued that since the return filed on March 1, 2022, was accepted by the AO for computation purposes, the non-issuance of a notice under Section 143(2) was a critical procedural flaw rendering the assessment void. The counsel also highlighted the Supreme Court’s order extending the limitation period due to the Covid-19 pandemic, making the late filing valid. The Departmental Representative (DR) contended that the return filed beyond the initial 30-day notice period was invalid, negating the requirement for a Section 143(2) notice. However, the ITAT, after considering the arguments and the fact that the AO had indeed used the late-filed return for assessment calculations, sided with the assessee. The Tribunal noted the Supreme Court’s extension of limitation, making the assesses return timely. Crucially, the ITAT observed the DR’s admission that no notice under Section 143(2) was issued. Citing the Calcutta High Court’s decision in PCIT Vs Oberoi Hotels (Pvt) Ltd., which held that an assessment without a Section 143(2) notice is unsustainable, the ITAT quashed the assessment order as being without jurisdiction. Consequently, the assesses appeal was allowed on this legal ground, leaving other grounds unaddressed for potential future adjudication.
